Why Townhomes Are Once Again Cornering The Market
Mortgage rates are currently so low that even if you aren’t in the market for your dream home, you can profit from investing in property instead of throwing money away on rent. It isn’t just the Tiny House or Shipping Container fads or mobile homes that are attracting Millennials looking to get out of their rental or parents’ basement; new townhomes are also making a resurgence in the market and allowing many looking for “luxe” living, the ability to live well.
Townhomes aren’t anything new. They have been around since the 19th century. The classic look of row house homes can be found in the oldest and most elegant cities in the United States. As an answer to overcrowding and the need for lower-income housing, townhouses and other attached single-family dwellings have made a huge comeback since the 1960s.
Not many Millennials can afford a single-family home in big cities like Chicago or Atlanta, and that is why row houses are increasing in popularity. Both first-home buyers and flippers are looking at the older townhouses or condominiums as a way to get the features they want, without having the same communal feel as living in a high-rise.
According to the National Association of Homebuilders, townhouses are the fastest-growing segment of single homes currently being constructed, due to their new popularity and affordability. The townhouse market was up more than 17% just from 2014 to 2015, while stand-alone construction was at a standstill at about 10%. Condos, other co-op situational living, and apartments fared the worst at just 12%.
Many of the buyers really targeting the townhome style are first-time buyers. Townhouses are the most popular type of house for those looking to make their first home purchase. Although the number of buyers is highest in the Millennial crowd, townhouses seem to be coveted by almost every age group.
The reason they are so popular is typically because of their low price. Millennials who might not have a whole lot of money to invest but still want to live close to the “action” aren’t dissuaded by the lack of “property space.” Also, those who are looking to downsize and want less to maintain find a townhouse’s lack of property maintenance, ideal. For others, it might be their first move into a better neighborhood while they save money for the home of their dreams.
Baby boomers are also finding nostalgia and desire in townhomes. Most townhomes require very little maintenance and are typically covered by homeowners’ associations who handle the exterior work and maintenance. That means that the homeowner’s weekends are free for fun instead of for yard work. And when there is damage to the exterior, it isn’t the property owner’s responsibility to fix it.
The location of townhomes is usually ideal as well. They are located in larger urban areas, and their location can help cut back on transportation costs and time. Many Millennials and young professionals can ditch their automobiles altogether and use public transportation for everything they need. When your budget is tight, that is a huge selling point.
The size of townhouses might not be as generous as most single-family homes, but that isn’t a problem for the people who are buying them up. Usually young professionals, small families, or retirees, they find themselves out and about more than sitting in the house. The yard isn’t a major selling point to someone in the market for a townhouse. With most townhouses being somewhere around 2,200 square feet, there is plenty of space to “live.”
Attractive to builders
For builders who are looking to “flip” or renovate and sell, townhouses are an excellent return on investment. Putting a little money in, can mean huge profits for someone who has the skill and knowledge to revamp an old townhouse community. Whether working on one or many simultaneously, a builder can get in and out while cashing in super fast in a buyer’s market.
Home builders also don’t have to invest a whole lot or put down any money to buy up and fix a townhouse. As the properties usually take only a month or two to fix up completely, the builders don’t have to take out high-interest loans or worry about holding onto them for very long.
The townhouse has been around forever, but it is currently seeing a huge surge in popularity. If you are looking for a single-family home that you can afford, a townhouse might be your best bet. But you’ll have to be quick and ready to say “I do” before someone else snatches up a good deal.